More on Housing

The Demand Institute released a new report on Boomers and housing. The Institute, according to its mission,  “illuminates the way in which consumer demand is evolving around the world. We help government and business leaders align investments with where consumer demand is headed across industries, countries and markets. The Demand Institute is a non-advocacy, non-profit organization and a division of The Conference Board… [and] is jointly operated by The Conference Board and Nielsen.” 

The report, Baby Boomers & Their Homes: On Their Own Terms notes that Boomers will be responsible for 25% of dollars spent on rent or home buying over the next 5 years. According to the report, expect the Boomers to break the mold of retirement housing of that past. The report states that “[m]ost [Boomers] plan to age in place, but many will move into larger homes and take out new mortgages to do so.”  In the survey done by the Demand Institute,  “more than 4,000 Baby Boomer households… [were asked] about their current living situation, moving intentions, and housing preferences, as a part of a broader initiative to understand where future home and community demand is headed.”  So what is expected to occur in the next 5 years?  A large amount of spending, according to the study: “Boomers will spend $1.9 trillion on new home purchases and $500 billion on rent in the next five years.” (yes, that says trillion and billion). The study also examines the Boomers retirement readiness, the desire to age in place (most because that is their preference, bur for others, due to a lack of choice primarily fueled by financial limitations). Despite their desire to age in place, according to the report, there is a disconnect between desire and reality:  “Boomers are planning major home improvements in the next three years, a significant number will make style and value a priority over aging-friendly features. In fact, the top Boomer reasons to renovate are similar to those of younger generations” which include increasing energy efficiency or home values, and updating the home.  The article has great charts and statistics, covers downsizing and upsizing, and desired location. For those of us living in Florida, the stats regarding our future snowbirds are not the best. The report indicates that of the Boomers surveyed, only 1/3 want to move out of state and only 20% want to live in “senior-related housing or active adult communities.”  Thinking about the Boomers retirement readiness and income security, this part of the report is a bit of a concern “[w]hen they purchase their next homes, more than half [of Boomers] will seek mortgage financing to do so. And most are confident in their ability to qualify for financing.”